Microsoft Infuses New BMWs with Windows CE

Although it’s been in the midst of a hectic touring schedule for its Visual Studio .NET, Microsoft Corp. showed
its pursuit of other fronts Monday when it revealed that BMW’s new 7 Series features a made-for-the-car version of
its Windows CE operating system.

The Redmond, Wash. firm, last iterated its telematics interests in January when it teamed with Accenture to offer
automakers, suppliers and service providers a seamless integration process for in-vehicle consumer services through the Accenture
Services Bureau for Automotive Telematics and Microsoft Car .NET architecture, services and products, including Windows CE for

Joining Microsoft in the endeavor to serve Bimmer customers with dashboard electronics is Siemens VDO Automotive
AG, which will us Windows CE operating system in the Control Display. For BMW, the deal symbolizes its “iDrive” strategy to enable
easy operation of navigation, telephone, climate control and entertainment systems.

The software giant isn’t the only high-tech heavyweight to be tabbed for its products, so it would seem that more and more firms are putting stock into estimations from research firms such as Forrester Inc., which predicted that some 80 percent of all new vehicles will feature telematics terminals by 2006.

For one, Intel Corp. bowed its XScale processors for the telematics market at a digital car conference in Detroit. The new chips, called the Intel PXA250 and Intel PXA210 applications processors, are designed to power software that delivers wireless voice and data information to vehicles.

For another, IBM Corp. too leapt into the fray when Korea’s
LG Electronics (LGE) asked IBM to help it enter the marketplace as a telematics supplier. Big Blue will introduce its embedded
software stack into LGE’s consumer electronics products, including personal digital assistants and mobile phones.

Specifically, LG will use IBM’s J9 virtual machine technology, which incorporates Java on the IBM platform to enable such tasks as
as remote access to a vehicle for when keys are inadvertently locked inside a car; security-tracking services (it it’s stolen),
automatic car-accident notification systems, and services such as real-time traffic information, news and weather updates, e-mail
and calendar-scheduling features.

Oyster Bay, N.Y. market research firm Allied Business Intelligence (ABI) recently predicted an upswing for the telematics market,
which had been bruised and battered in 2001. In particular, the firm sees fleet management system (FMS) telematics for commercial
car use as the niche where it will gain momentum, predicting that this sector will grow from under $2 billion in 2001 to nearly $6
billion by 2007’s end.

“Due to deteriorated market conditions, increased competition, and higher debt, many FMS vendors have been forced to restructure and
focus on their core competencies,” said Frank Viquez, senior analyst and report author. “As a result of this, 2002 will witness
rising competition and market specialization, progressively more sophisticated distribution channels, and increased product
differentiation in commercial vehicle telematics offerings.”

Microsoft said Monday’s news is first of several related announcements to come from its Automotive Business Unit. The BMW 7 Series
is now available in North America and will be available in other markets this spring.

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